Speculation and Trading Update29 Aug 2020 11:06
So reading alot of the posts I find it somewhat amusing , as to what some people are saying.
RR share p rices are at a low price as the market sees the company as a risk, which is reflected in t-3 price. The chance to buy in to these low prices offer the early risk takers a chance to capitalise before maturity sets in place and the demand rises.
Buying at these low prices is therefore always at a risk and fluctuation will happen until there is a clear outlook on Flying hours increasing and Covid 19 retreating and stabilising.
That means in my opinion the big risk buyers have bought in from 212-400, without clear indication of of stabilisation and revenue.
Lets look at the facts,
service maintenence has dropped,
RR have cleverly written the hedge book value by 10 billion and reflect this in this update
RR with GE are in a unique position as providers of engines to the airlines, its a case of no more flyin- but when will flying be realistically back to pre covid norms, and this itself is why demand for the share is low and reflects the value.
I see alot of scaremongering, but these prices the shares are at and the current market going through a risk off approach across the European Stoxx 600, means we are not going to experience. V shape recovery like the US markets.
Also american markets are very bullish compared to European markets so those, who think they could see a quick rise , also need to be aware that this bullish activity might not occur with RR.
So what im trying to.say here is that if you are after a quick gain, day trade to week trade whilst the market is volatile, expect downturns and upturns,
The clear facts are that RR have outlined all there issues going forward but are keen on ensuring they have substantial liquidity throughout the crisis.
They are also aware of Rights Issue will be a last resort and want to do best for current investors .
So this is where i see RR heading,
2020 Q3 fluctuations between 200-350 pence
Positive results from Q3 maintence earnings might push it to 380-400
2020 Q4 prices could.fluctuate between 300-450 as the market will.hopefully move towards a risk on approach, and also more positive.
Now 2021 onwards will be interesting, with the restructure, and sell ITF sell offs being achieved and a further increase in long haul.flights and the possibility of a tried and testing vaccine there could be further gradual increases, and the new set of investors come in in happy to pay RR stock for 350-550 per share.
So a fact, the RR share price at this price of 220-290 in this quarter is a high risk purchase and it all depends on market sentiment to swing the prices.
Watching people here i can see is a.mixture of short and longer term. What could jearpodise this is a sudden announcement of Rights Issue, but the H2 update implies that the earliest they would consider the 2 billion needed to replace and pay for the current loan which finishes in summer 2021.
All I can